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Effects of Income Inequality on Aggregate Output / Brueckner, Markus
World Bank Open Knowledge Repository (formerly "World Bank E-Library Publications") Available online
View online- Format:
- Book
- Government document
- Author/Creator:
- Brueckner, Markus
- Series:
- Policy research working papers.
- World Bank e-Library.
- Language:
- English
- Subjects (All):
- Macroeconomics and Economic Growth.
- Poverty Reduction.
- Local Subjects:
- Macroeconomics and Economic Growth.
- Poverty Reduction.
- Physical Description:
- 1 online resource (34 pages)
- Place of Publication:
- Washington, D.C., The World Bank, 2015
- System Details:
- data file
- Summary:
- This paper estimates the effect of income inequality on real gross domestic product per capita using a panel of 104 countries during the period 1970-2010. The empirical analysis addresses endogeneity issues by using instrumental variables estimation and controlling for country and time fixed effects. The analysis finds that, on average, income inequality has a significant negative effect on transitional gross domestic product per capita growth and the long-run level of gross domestic product per capita. However, the impact varies by the level of economic development, so much so that in poor countries income inequality has a significant positive effect on gross domestic product per capita.
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